Hampton Roads Bankshares Announces First Quarter Financial Results

Hampton Roads Bankshares Announces First Quarter Financial Results

  *Net income available to shareholders of $0.6 million, which includes a
    $2.8 million branch consolidation charge
  *Successful money market campaign raises more than $60 million of deposits
    in quarter
  *Loan originations increase by 72% year-over-year to $83 million
  *Nonperforming assets decline for tenth consecutive quarter

VIRGINIA BEACH, Va., April 17, 2013 (GLOBE NEWSWIRE) -- Hampton Roads
Bankshares, Inc. (the "Company") (Nasdaq:HMPR), the holding company of the
Bank of Hampton Roads and Shore Bank, today announced financial results for
the first quarter of 2013. The Company reported a net profit available to
shareholders of $0.6 million, which includes a $2.8 million charge related to
a previously-announced branch consolidation, compared to a net loss available
to shareholders of $7.9 million for the first quarter of 2012 and a net loss
available to shareholders of $5.6 million for the fourth quarter of 2012.

"The Company's return to profitability in the first quarter, and a
year-over-year increase of greater than $8.5 million in earnings, which
includes this quarter's $2.8 million branch consolidation charge, reflect
strong progress on many fronts," said Doug Glenn, President and Chief
Executive Officer. "We have positioned the Company for continuing improvement
in performance through a sharp focus on our core community banking franchise,
greater operating efficiency, and an improved balance sheet. Going forward, we
will continue to implement and refine our One Bank strategy, which is designed
to consistently deliver choice, convenience and outstanding service to our
customers through a strong team of bankers and the right mix of branches and
electronic banking services."

Net interest income for the first quarter of 2013 was $15.9 million compared
to $16.7 million in the first quarter of 2012 and $16.3 million in the fourth
quarter of 2012. The year over year decline in net interest income is the
result of declines in average interest earning assets, partly offset by an
increase in net interest margin. Net interest margin was 3.45% in the first
quarter compared to 3.39%^1 in the first quarter of last year and 3.42%^2 in
the fourth quarter of 2012. Net interest margin improvement on a year over
year and linked quarter basis is attributable to a reduction in funding costs
and a decline in nonperforming loans.

Due to continued improvement in overall loan quality, the Company did not
record a provision for loan loss expense in the first quarter of 2013.The
Company recorded a $7.3 million provision for loan loss expense in the first
quarter of 2012 and a $0.9 million provision for loan loss expense in the
fourth quarter of 2012.The decision not to record a provision for loan loss
expense in the quarter reflected management's consideration of the qualitative
and quantitative aspects of the allowance for loan losses.Ultimately,
management concluded that the current level of the allowance for loan losses
was appropriate given the Company's current expectations for known and
inherent credit losses in the loan portfolio.

Nonperforming assets were $112.5 million as of March 31, 2013, a decline of
$18.2 million from year-end 2012.This continues the trend of ten consecutive
quarters of asset quality improvement.Nonperforming assets represented 5.53%,
6.36% and 8.90% of total assets at March 31, 2013, December 31, 2012 and March
31, 2012, respectively.

Noninterest income was $5.4 million during the first quarter of 2013 compared
to $3.1 million during the first quarter of 2012 and $0.4 million during the
fourth quarter of 2012.The increase reflected continued strong mortgage
origination revenues resulting from the continued low interest rate
environment, supplemented by a decline in losses and impairments on foreclosed
real estate.Noninterest income would have been $8.4 million for the quarter
but for the $2.8 million charge related to the consolidation of branches as
previously announced during the quarter.This consolidation was part of the
implementation of the Company's One Bank strategy and no additional
consolidations are planned at this time.

During the first quarter of 2013, the Company recognized $0.4 million of other
income from the final resolution of certain Internal Revenue Service
examination issues related to the amendment of federal tax returns of Gateway
Financial Holdings, Inc. from 2006 to 2008.As referenced in the Company's
10-K filed on March 25, 2013, the Company maintains a net deferred tax asset
of $173.0 million as of December 31, 2012, against which the Company maintains
a full valuation allowance.

Noninterest expense was $19.4 million during the first quarter, compared to
$19.9 million in the first quarter of 2012 and $22.4 million in the fourth
quarter of 2012.The decline in noninterest expense reflected reductions in
data processing expense, legal fees and costs associated with lower levels of
non-performing assets, partly offset by higher salary and benefit expense in
our mortgage operations to meet higher loan demand and the expense accrued for
incentive compensation plans at the subsidiary banks.

As of March 31, 2013, total assets were $2.03 billion, compared to $2.05
billion at December 31, 2012.During the first quarter, loans outstanding
decreased slightly from $1.43 billion to $1.41 billion due primarily to the
continued resolutions of problem loans.Origination volumes were offset by
principal paydowns and scheduled amortization in the portfolio.Total deposits
declined during the quarter to $1.60 billion from $1.62 billion at December
31, 2012 as the Company saw an increase in interest bearing deposits resulting
from a successful money market account campaign, offset by declines in time
deposits and non interest bearing demand deposits. Total assets, loans and
deposits at March 31, 2012 were $2.13 billion, $1.47 billion and $1.77
billion, respectively.

At March 31, 2013, the Company exceeded all of the regulatory capital minimums
and Bank of Hampton Roads and Shore Bank were both considered "well
capitalized" under all applicable regulatory capital standards.

^1 Previously reported as 3.62%, the Company elected during the first quarter
of 2013 to include nonperforming loan balances in the calculation of interest
earning assets when computing the net interest margin.During the first
quarter of 2012, $126.2 million of average nonperforming loan balances were
excluded from the interest earning asset total.

^2 Previously reported as 3.62%, the Company elected during the first quarter
of 2013 to include nonperforming loan balances in the calculation of interest
earning assets when computing the net interest margin.During the fourth
quarter of 2012, $102.0 million of average nonperforming loan balances were
excluded from the interest earning asset total.

Caution About Forward-Looking Statements

Certain statements made in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.Forward-looking statements are statements that include projections,
predictions, expectations, or beliefs about events or results or otherwise are
not statements of historical facts, including statements about future trends
and strategies.Although the Company believes that its expectations with
respect to such forward-looking statements are based upon reasonable
assumptions within the bounds of its existing knowledge of its business and
operations, there can be no assurance that actual results, performance or
achievements of the Company will not differ materially from those expressed or
implied by such forward-looking statements.Factors that could cause actual
events or results to differ significantly from those described in the
forward-looking statements include, but are not limited to those described in
the cautionary language included under the headings "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2012 and other filings made with the SEC.

About Hampton Roads Bankshares

Hampton Roads Bankshares, Inc. is a bank holding company headquartered in
Virginia Beach, Virginia.The Company's primary subsidiaries are The Bank of
Hampton Roads, which opened for business in 1987, and Shore Bank, which opened
in 1961 (collectively, the "Banks"). The Banks engage in general community
and commercial banking business, targeting the needs of individuals and small
to medium-sized businesses.Currently, The Bank of Hampton Roads operates 33
banking offices in Virginia and North Carolina doing business as Bank of
Hampton Roads and Gateway Bank & Trust Co. Shore Bank serves the Eastern
Shore of Maryland and Virginia through seven banking offices and two loan
production offices in West Ocean City, Maryland and Rehoboth Beach, Delaware.
Through various affiliates, the Banks also offer mortgage banking services and
investment products.Shares of the Company's common stock are traded on the
NASDAQ Global Select Market under the symbol "HMPR."Additional information
about the Company and its subsidiaries can be found at
www.hamptonroadsbanksharesinc.com.


Hampton Roads Bankshares, Inc.
Financial Highlights
(in thousands, except per share data)


Operating Results                Q1 2013         Q4 2012        Q1 2012
                                                             
Interest income                  $ 19,530        $20,093    $21,606
Interest expense                 3,600         3,804       4,906
Net interest income              15,930          16,289         16,700
                                                             
Provision for loan losses        --             870           7,302
                                                             
Noninterest income               5,428          366           3,109
                                                             
Noninterest expense              19,432         22,356        19,911
                                                             
Income tax benefit               --             (2,182)       --
Net income/(loss)                1,926         (4,389)      (7,404)
                                                             
Net income attributable to       1,294           1,210         502
noncontrolling interest
Net income/(loss) attributable
to Hampton Roads Bankshares,     $632          $ (5,599)     $ (7,906)
Inc.
                                                             
                                                             
Per Share Data                                                
                                                             
Loss per share:                                               
Basic                            $--         $ (0.03)  $ (0.23)
Diluted                          --           (0.03)       (0.23)
Common dividends declared        --           --           --
Book value per common share      1.09          1.08         3.05
Book value per common share -    1.08          1.07          2.95
tangible
                                                             

Balance Sheet at Period-End      Q1 2013         Q4 2012        Q1 2012
                                                             
Total assets                     $2,032,342   $2,054,092 $2,133,027
Gross loans                      1,412,650     1,432,275    1,471,998
Allowance for loan losses        43,709        48,382        68,917
Total investment securities      309,992        294,521      334,622
Intangible assets                2,075         2,410        3,415
Total deposits                   1,595,164     1,617,774    1,772,122
Total borrowings                 235,942       236,062      236,431
Shareholders' equity             185,362       184,723       105,298
Shareholders' equity - tangible  183,287       182,313      101,883
                                                             
                                                             
Daily Averages                   Q1 2013         Q4 2012        Q1 2012
                                                             
Total assets                     $2,031,259 $2,057,454  $ 2,159,488
Gross loans                      1,427,245     1,399,480    1,484,814
Total investment securities      303,947     314,924      305,855
Intangible assets                2,235       2,560        3,574
Total deposits                   1,594,867     1,615,975    1,791,570
Total borrowings                 236,003        236,112      236,524
Shareholders' equity             185,361       187,592      112,283
Shareholders' equity - tangible  183,126        185,032       108,709
Interest-earning assets          1,874,746      1,889,491    1,979,889
Interest-bearing liabilities     1,592,562      1,601,172     1,805,115
                                                             
                                                             
Financial Ratios                 Q1 2013         Q4 2012        Q1 2012
                                                             
Return on average assets         0.13%           -1.08%         -1.47%
Return on average common equity  1.38%           -11.87%        -28.32%
Return on average common equity  1.40%           -12.04%        -29.25%
- tangible
Net interest margin              3.45%           3.42%          3.39%
Efficiency ratio                 80.35%          135.43%        100.45%
Tangible common equity to        9.03%           8.89%          4.78%
tangible assets
                                                             
                                                             
Allowance for Loan Losses        Q1 2013         Q4 2012        Q1 2012
                                                             
Beginning balance                $48,382     $54,444     $74,947
Provision for losses             --             870          7,302
Charge-offs                      (6,091)       (9,619)      (15,285)
Recoveries                       1,418          2,687         1,953
Ending balance                   $43,709       $48,382      $68,917
                                                             
                                                             
Nonperforming Assets at          Q1 2013         Q4 2012        Q1 2012
Period-End
                                                             
Nonaccrual loans including       $ 78,633     $ 97,411    $128,805
nonaccrual impaired loans
Loans 90 days past due and still --           1,024         --
accruing interest
Other real estate owned and      33,834        32,215        61,028
repossessed assets
Total nonperforming assets       $112,467     $130,650     $ 189,833
                                                             
                                                             
Asset Quality Ratios             Q1 2013         Q4 2012        Q1 2012
                                                             
Annualized net (chargeoffs)      -1.33%          -1.97%         -3.61%
recoveries to average loans
Nonperforming loans to total     5.57%           6.87%          8.75%
loans
Nonperforming assets to total    5.53%           6.36%          8.90%
assets
Allowance for loan losses to     3.09%           3.38%          4.68%
total loans
                                                             
Composition of Loan Portfolio at Q1 2013         Q4 2012        Q1 2012
Period-End
                                                             
Commercial                       $239,563    $267,080    $244,619
Construction                     199,782    206,391    271,623
Real-estate commercial           553,349      530,042    531,734
Real-estate residential          364,743       372,591    400,451
Installment                      56,297        56,302      23,591
Deferred loan fees and related   (1,084)       (131)        (20)
costs
Total loans                      $ 1,412,650    $ 1,432,275   $ 1,471,998

Use of Non-GAAP Financial Measures

This earnings press release contains GAAP financial measures and non-GAAP
financial measures where management believes it to be helpful in understanding
our results of operations or financial position.Tangible common equity to
tangible assets ratio is not a measure recognized under GAAP and, therefore,
is considered a non-GAAP financial measure.The most comparable GAAP measure
is the ratio of total common shareholders' equity to total assets.

Management uses this non-GAAP financial measure to assess the strength of the
Company's capital position.The Company believes that this non-GAAP financial
measure provides meaningful additional information about the Company to assist
investors in evaluating the Company's financial strength and
capitalization.The tangible common equity to tangible assets ratio is used by
management and investment analysts to assess the strength of the Company's
capital position absent the effects of intangible assets.Management, banking
regulators and many stock analysts use the tangible common equity ratio in
conjunction with more traditional bank capital ratios to compare the capital
adequacy of banking organizations with significant amounts of intangible
assets.

Below is a reconciliation of this non-GAAP financial measure to the most
directly comparable financial measure calculated and presented in accordance
with GAAP.


Non-GAAP Measurement
March 31, 2013
                                          As of       As of        As of
(dollars in thousands)                    March 31,   December 31, March 31,
                                          2013        2012         2012
                                                                
Total assets                              $ 2,032,342 $ 2,054,092  $ 2,133,027
Less:intangible assets                   2,075      2,410        3,415
Tangible assets                           $ 2,030,267 $ 2,051,682  $ 2,129,612
                                                                
Total shareholders' equity                $ 185,362   $ 184,723    $ 105,298
Less: intangible assets                  2,075      2,410        3,415
Common shareholders' equity - tangible    $183,287   $ 182,313    $ 101,883
                                                                
Tangible common equity to tangible assets 9.03 %     8.89 %      4.78 %
                                                                
Total common shareholders' equity to      9.12 %     8.99 %      4.94 %
total assets

CONTACT: Douglas J. Glenn
         President and Chief Executive Officer
         (757) 217-1000
 
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